An n-type iron$silicide(Fe_{0.98}Co_{0.02}Si_2)$has been produced by mechanical alloying process and consolidated by vacuum hot pressing. Although as-milled powders after 120 hours of milling did not show an alloying progress,${eta}-FeSi_2$phase transformation was induced by isothermal annealing at$830{circ}C$for 1 hour, and the fully transformed${eta}-FeSi_2$phase was obtained after 4 hours of annealing. Near fully dense specimen was obtained after vacuum hot pressing at$ 1100{circ}C$with a stress of 60MPa. However, as-consolidated iron silicides were consisted of untransformed mixture of ${Alpha}-Fe_2Si_5$and ${varepsilon-FeSi$phases. Thus, isothermal annealing has been carried out to induce the transformation to a thermoelectric semiconducting${eta}-FeSi_2$phase. The condition for${eta}-FeSi_2$transformation was investigated by utilizing DTA, SEM, and XRD analysis. The phase transformation was shown to be taken place by a vacuum isothermal annealing at$830{circ}C$and the transformation behaviour was investigated as a function of annealing time. The mechanical properties of${eta}-FeSi_2$materials before and after isothermal annealing were characterized in this study.